PRESS CONFERENCE ON AWARD OF TSING MA BRIDGE CONTRACT, AT C.G.O. MULTI-PURPOSE HALL, MAY 7, 1992.
TAKING PART WERE THE SECRETARY FOR THE TREASURY, MR K.Y. YEUNG; ECRETARY FOR TRANSPORT, MR MICHAEL LEUNG; SECRETARY FOR WORKS, MR JAMES BLAKE; DIRECTOR OF HIGHWAYS, MR S.K. KWEI; AND DEPUTY PRINCIPAL CROWN COUNSEL, MR GEORGE ROSENBERG.
Q: I'M NOT SURE HOW MUCH MORE YOU CAN DAMAGE HYUNDAI'S REPUTATION THAN YOU ALREADY HAVE BUT I AM WONDERING. WE DON'T HAPPEN TO HAVE ANY FINANCIALS FOR HYUNDAT. CAN YOU TELL US WHAT THEIR CAPITAL SITUATION IS AND HOW SHORT, AND HOW MUCH IT HAS DETERIORATED OVER THE LAST YEAR?
MR YEUNG: YES, WE CAN, BUT BEFORE I ASK MR BLAKE TO DO SO, IT'S ONE THING A BUSINESS ORGANISATION ALLOWING ITS POSITION TO BE DAMAGED THROUGH REPORTS IN THE MEDIA AND SO ON. IT'S QUITE ANOTHER THE GOVERNMENT TAKING A CONSCIOUS STEP TO, AS IT WERE, THROW MUD AT A WE ARE NOT IN THE BUSINESS OF DOING THAT. MR BLAKE, YOU MAY WISH TO ANSWER THE QUESTION ABOUT CAPITAL SHORTAGE.
COMPANY AND WE DON'T DO THAT. DON'T DO THAT.
MR BLAKE: THE SHORTFALL IS MEASURED AGAINST THE ROLES WHICH APPLY TO ALL CONTRACTORS IN HONG KONG, ALL LISTED CONTRACTORS AND ALL PRE- QUALIFIED CONTRACTORS. HYUNDAI AND ALL CONTRACTORS HAVE A COPY OF THESE RULES WHICH ARE SPELT. OUT VERY CLEARLY. THEY DEFINE HOW THE CALCULATIONS FOR EMPLOYED AND WORKING CAPITAL ARE OBTAINED. TO MAKE THESE CALCULATIONS, WE HAVE ACCESS TO PUBLISHED ACCOUNTS FROM EACH OF THE CONTRACTORS. SO WE ARE NOT USING INFORMATION THAT IS NOT ALREADY IN THE PUBLIC DOMAIN, IT IS TAKEN FROM THE COMPANY'S OWN AUDITED ACCOUNTS. IN THE CASE OF HYUNDAI, THE INFORMATION THAT WAS ORIGINALLY AVAILABLE AUDITED WAS FROM 1989. WE ALSO CHECK HALF-YEARLY ON THE BASIS OF UNAUDITED ACCOUNTS WHICH ARE NOT AVAILABLE TO THE PUBLIC BUT WHICH ARE SUPPLIED TO GOVERNMENT. OUR DECISION IN AUGUST WAS TAKEN ON THE BASIS OF THEIR LATEST AUDITED ACCOUNTS WHICH WERE FOR THE YEAR ENDING 1990. I THINK I CANNOT REALLY GO FURTHER THAN THAT IN GIVING YOU FACTUAL INFORMATION, YOU HAVE OF COURSE ACCESS TO THE SAME ACCOUNTS AS WE HAVE. IF YOU WISH TO HAVE ACCESS TO THE TECHNICAL CIRCULAR THAT COULD BE PROVIDED AS IT IS INDEED PROVIDED TO ALL CONTRACTORS. I WOULD ONLY SAY THIS THAT CONTRACTORS KNOW THAT WHEN THEY ARE ADMITTED TO THE GOVERNMENT LISTS THEY MUST COMPLY WITH THESE WORKING AND EMPLOYED CAPITAL REQUIREMENTS. THEY KNOW THAT WHILST THEY · REMAIN A LISTED CONTRACTOR THEY ARE SUBJECT TO REGULAR MONITORING ON A YEARLY BASIS AND IF THERE ARE DEFICIENCIES APPEARING AND OF COURSE WITH CONTRACTORS DEMANDS ON CASH AND CASHFLOW FROM TIME TO TIME WE DO HAVE DEFICIENCIES APPEARING. IT IS ON THEIR PART AND OBLIGATION TO MAKE GOOD THOSE DEFICIENCIES TO REMAIN UPON THE LIST BUT THEY ALSO KNOW THAT IF THERE IS ANY DEFICIENCY AGAINST THEIR POSITION THIS DEFICIENCY MUST BE CORRECTED BEFORE GOVERNMENT CAN PROCEED WITH AN AWARD OF CONTRACT. THAT IS A REQUIREMENT WHICH IS SPELLED OUT IN THE TECHNICAL CIRCULAR AND THE WORD 'MUST' IS USED IN THE TECHNICAL CIRCULAR.
Q: DO YOU SAY HOW MUCH THE CAPITAL REQUIREMENTS ARE IN THE CIRCULAR? CAN WE PIECE THIS TOGETHER BY OURSELVES?
A: YES, WE SHOW HOW THESE ARE CALCULATED.
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